Missouri Model Tax Increment Financing Eyed to Boost "Pure Michigan"

That's the message of leaders who are promoting the state and hoping to revitalize the economy devastated by retraction of the auto industry.

Michigan is making national news every day at every hour with its promotions. The campaign is aimed at offsetting a negative image that arose among political and business types because of the state's labor and financial woes arising over the past few decades.

Travelers who need a tee time at a Michigan golf course or who need a place to stay have a "one stop" option for reservations at www.teetimes@michigan.org.

For lodging, the web access is www.milodging.org.

Gov. Jennifer Granholm has this to say about the state's strategy to reverse the economic decline:

"Building Michigan's tourism industry through increased promotion is consistent with our long term plans to create jobs statewide. But, it's more than just promotion. Improvements to the Michigan Economic Growth Authority Act (MEGA) now, for the first time, make tourism development projects like cultural, historical or scenic sites eligible for MEGA tax credits."

Steve Yencich, president of the Michigan Lodging and Tourism Association (MLTA), is backing a tax increment financing plan to fill the state's hotels, motels, restaurants and golf courses.

The plan would build on Michigan's newly established network for a one-stop signup for tee times at Michigan courses and reservations at hotels and motels.

And, it would parlay the flashy "Pure Michigan" $30 million ad campaign splashing Michigan's tourism advantages all over the nation.

"Pure Michigan" is the brainchild of George Zimmerman of Travel Michigan, an organization that works cooperatively with the MLTA.

Mr. Yencich, who spoke here recently to the Tri-County Economics Club, said the Michigan tax increment financing (TIF) plan would establish the sales tax revenues generated last year by a wide variety of tourism-related businesses as a baseline.

"Moving forward, any tax revenues generated over and above that baseline would be poured into a special fund created to support the 'Pure Michigan' campaign," he said.

Earlier this year, Speaking on behalf of a coalition of tourism and business groups, three of Michigan's leading travel and resort industry executives called for a portion of the $18 billion federal stimulus funds to be received by Michigan to go towards a multi-year funding package to promote state tourism.

R.D. "Dan" Musser III, president of the world-renowned Grand Hotel on Mackinac Island; Stephen Kircher, president of eastern operations for Boyne USA Resorts, including three of Michigan's premier resort destinations; and Steve Yencich, president and CEO of the Michigan Lodging and Tourism Association, one of this state's leading tourism advocacy organizations, called on the legislature to invest a portion of the stimulus package to continue current funding levels for the "Pure Michigan" campaign for the next three years.

The TIF is a Missouri model, overlooked by many states when it was first adopted in some years back, because at the onset it only brought in a few million dollars, Mr. Yencich explained.

"Most states assumed this model was insufficient to their needs. However, in hindsight, that was a glaring error. A TIF raises little at first, but the revenues it generates are accumulative. In short, financing grows incrementally, not unlike interest rates."

Missouri's TIF has since grown to over $20 million annually to fund travel and tourism to destinations like St Louis and Branson, he observed, commenting: "Passage of legislation creating a TIF for our state is the best long-term solution to providing $30 million in ongoing funding for the 'Pure Michigan' campaign; and we applaud the MEDC for extending the proposal. The trick is to find a short-term funding model that can get us from where we are; to that point in time when the TIF generates $30 million each year. And that's the rub.

MLTA has long been in support of any approach that does so without imposition of new taxes, fees, assessments or surcharges, said Mr. Yencich.

The MEDC estimates that adoption of a Michigan TIF would raise around $8 million in fiscal year 2010. According to Mr. Yencich, here's the problem:

"There's no single proposal above that currently enjoys enough support to pass both the House, Senate and be signed into law. However, it's said that the essence of politics is compromise and in that spirit - the recipe for success can be found."

"We are pleased to offer this new system to golf enthusiasts nationwide, making michigan.org a one-stop shop for tee times and golf packages," said George Zimmermann, Vice President of Travel Michigan. "We have some of America's best golf, and now we have the best way to book tee times, golf packages, and hotel rooms."

"MI Tee Times" is open to all Michigan golf courses, but to participate in the tee time reservation and packaging, golf courses and lodging properties must opt in and provide a commission to the GolfSwitch Network, the technology partner.

"Golf Digest named the state the 12th best golf destination in the world, which means that in addition to a good game, there are great destinations beyond the links," said Mr. Zimmerman. "There's plenty to see and do in and around Michigan's more than 850 public golf courses.

"Michigan lodging properties can participate by helping to market the availability of the program which allows golfers everywhere to schedule tee times online, in real time. Peruse the list of participating golf courses and if a course near you isn't already involved - call them and encourage them to sign up!"

(Note: It appears that no tri-county/Great Lakes Bay Area golf courses are participating in the MI Tee Times program; the closest course on the list is at Roscommon.)

MLTA encourages member properties to collaborate with participating golf courses to create special golf packages, rates and promotions to help this exciting new program gain additional traction. With the exception of local players all golfers will need a place to stay overnight. "This fact combined with the ongoing national cable TV buy for 'Pure Michigan' will help generate interest and demand, put players on links and heads in beds," Mr. Zimmerman added.

We just returned from a 3,350 mile vacation drive that looped through West Virginia, Virginia, over to Texas and back. We saw "Pure Michigan" TV spots at several stops as well as some billboards on the highway. All were well done and a pleasure to see.